Corporate Governance Deviance

Forthcoming, Academy of Management Review

50 Pages Posted: 30 Apr 2018

See all articles by Ruth V. Aguilera

Ruth V. Aguilera

Northeastern University - Department of International Business and Strategy

William Q. Judge

Old Dominion University

Siri A. Terjesen

Norwegian School of Economics (NHH); American University

Date Written: November 11, 2017

Abstract

We develop the concept of corporate governance deviance and seek to understand why, when, and how a firm adopts governance practices that do not conform to the dominant governance logic. Drawing on institutional theory, coupled with the entrepreneurship and corporate governance literatures, we advance a middle range theory of the antecedents of corporate governance deviance that considers both the institutional context and firm-level agency. Specifically, we highlight the centrality of a firm’s entrepreneurial identity as it interacts with the national governance logic to jointly create corporate governance discretion (i.e., the latitude of accessible governance practices) within the firm. We argue that as a firm’s governance discretion increases, it will be more likely to adopt over- or under-conforming governance practices that deviate from established norms and practices. Moreover, we propose that adopting a deviant corporate governance practice is contingent on the governance regulatory environment and a firm’s corporate governance capacity. We conclude by advancing a new typology of corporate governance deviance based on a firm’s over- or under-conformity with the dominant national logic, as well as its entrepreneurial identity motives. This globally-relevant study refines and extends comparative corporate governance research and enriches our current understanding of the institutional logics perspective.

Keywords: Comparative Corporate Governance, Governance Discretion, Governance Capacity, Corporate Governance Deviance, Institutional Logics, Entrepreneurial Identity

JEL Classification: G30, G34, L20, L26, L31, O17

Suggested Citation

Aguilera, Ruth V. and Judge, William Q. and Terjesen, Siri A., Corporate Governance Deviance (November 11, 2017). Forthcoming, Academy of Management Review. Available at SSRN: https://ssrn.com/abstract=3160563

Ruth V. Aguilera

Northeastern University - Department of International Business and Strategy ( email )

Boston, MA 02115
United States

William Q. Judge

Old Dominion University ( email )

Norfolk, VA 23529-0222
United States
7576836730 (Phone)

Siri A. Terjesen (Contact Author)

Norwegian School of Economics (NHH) ( email )

Helleveien 30
Bergen, NO-5045
Norway

American University ( email )

4400 Massachusetts Ave, NW
Washington, DC 20016
United States

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